Japan quake could hit semiconductor production, prices

Lucas Mearian |
March 11, 2011

Lesser earthquakes have in the past affected manufacturing

By comparison, a 7.6-magnitude earthquake that hit Taiwan in 1999 caused significant damage in Taipei and stopped fabrication production in facilities in Hsin Chu, according to Objective Analysis. In the U.S., the 1989 Loma Prieta earthquake, which measured 6.9 on the Richter scale, stopped fabrication production in Silicon Valley.

That earthquake had only one hundredth of the power of today's earthquake.

"Objective Analysis is contacting as many of these companies as we can to check on their status, but the earthquake is so large that it might be several days before its impact can be fully comprehended," the company stated in a statement.

In many ways, Japan's semiconductor industry is far more prepared for disasters of this magnitude than facilities in other Asian countries. Not only does Japan have the most stringent building codes for earthquake preparedness, but its fabrication plants are spread throughout the country.

In Korea and Taiwan, two other major semiconductor producers, facilities are grouped together, according to Handy.

"In Taiwan, the government set up special areas for semiconductor manufacturing in Hsinchu," he said. "In Korea, they're mostly located in Chungju. If North Korea, with all its weirdness, were to drop a bomb on Chungiu, it could badly disrupt production."